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Government tells banks to slash interest rates right away
The ceiling and basic interest rates would reduce by one percent to stand at 13 percent and 8 percent a year in the next few days, announced the Governor of the State Bank of Vietnam yesterday.
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The central bank's Governor Nguyen Van Binh. |
Chairman of the Government’s Office Vu Duc Dam said at the government’s press conference on March 6 that conditions for cutting down interest rates had been ripe.
According to the government’s official, the consumer price index (CPI) in the first two months of 2012 increased 2.38 percent, the lowest level in several years. Besides, the liquidity, interest rate, the currency balance, securities, etc. have been improved.
“This is the right time for cutting down interest rates because the CPI in the first quarter usually accounts for a half of the whole year’s CPI,” Dam said.
The government, therefore, has told the State Bank of Vietnam to take measures to slash interest rates. Accordingly, the central bank’s Governor will have to announce the reduced interest rates right after the monthly cabinet meeting.
According to several commercial banks, the liquidity has been improved. The inter-bank interest rate has felt to less than 10 percent/year in recent days. Some banks have gradually reduced the lending interest rate to less than 14 percent. Experts said that conditions for cutting down interest rate are ripe.
At the press conference, Governor Nguyen Van Binh said that it was the time to slash all basic interest rates and the ceiling deposit interest rates by one percent.
“The new ceiling interest rate will be made public in the next few days,” Binh added.
Binh said that the lending interest rate reduced to 17-19 percent at the end of 2011. In the first two months of 2012, the situation was positive. He said that in recent days, the inter-bank interest rate with healthy credit institutions, which account for 90 percent of the market, had felt to 7-14 percent a year. Unhealthy banks (nine), which account for 6 percent of the market, had to borrow capital from other banks, at high interest rates, which are between 18-20 percent a year.
The central bank’s Governor said that unhealthy banks did not make impacts on the market. “The liquidity of the system has been improved and will be improved in the coming time, thanks to the State Bank of Vietnam’s policy,” Binh said.
The current ceiling deposit interest rate for the Vietnam dong, with one-month term upwards, at commercial banks is 14 percent per annum and 6 percent for deposits of less than one month. The highest rate for US dollar deposits is 2 percent a year. The basic interest rate is 9 percent a year.
Le Ha
vietnamnet
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